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Extensions of the Traditional Travel Cost Model of Non-Market Valuation to a Collective Framework: Evidence from the Field

  • Marcella Veronesi

    ()

    (Department of Economics (University of Verona))

  • Martina Menon

    ()

    (Department of Economics (University of Verona))

  • Federico Perali

    ()

    (Department of Economics (University of Verona))

Traditional recreation demand models do not make a distinction between a household and an individual as the reference decision-making unit, thus assuming that a family maximizes a single utility function, even if it consists of different individuals. Such models ignore the possibility of family members’ divergent preferences for non-market goods. This study proposes a novel approach—the “collective travel-cost model” (CTCM)—to eliciting individual preferences for a non-market good such as a recreation site by using revealed preference data. This approach accounts for the intra-household resource allocation and the role of each household member’s preferences. We show that the collective travel-cost model can be applied to estimating a recreation demand model that yields individual welfare estimates appropriate for policy analysis of non-market goods, such as the willingness-to-pay to access a recreation site. We find that how resources are distributed within the household reflects significant differences in welfare measures.

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Paper provided by University of Verona, Department of Economics in its series Working Papers with number 42/2007.

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Length: 50
Date of creation: Jan 2007
Date of revision:
Publication status: Published in American Journal of Agricultural Economics (2014)
Handle: RePEc:ver:wpaper:42/2007
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